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Loan Offer On Personal Loan

The interest rates on personal loans differ from one bank to another. The rates are often influenced by application-based variables such as the applicant’s credit score, loan quantity and tenure.

BANK Interest Loan Amount
Axis Bank 12-24% 50,000-15 lakhs
Bajaj 12.99% onwards Up to 25 lakhs
Citi Bank 10.50-18.99% 50,000-30 lakhs
Fullerton India 12-36% Up to 25 lakhs
Hdfc Bank 10.75-21.30% 50,000-40 lakhs
Icici Bank 11.25% onwards 50,000-20 lakhs
Idfc First Bank 11.50% onwards 1 lakh-25 lakhs
IndusInd Bank 10.75% onwards 50,000-15 lakhs
Standard Chartered Bank 10.99% onwards 1 lakh-30 lakhs
Kotak Mahindra Bank 10.99-24% 50,000-15 lakhs
Sbi Bank 10.50% onwards Up to 20 lakhs
Tata Capital 10.99% onwards 75,000-25 lakh
UCO Bank 10.95% onwards Up to 10 lakhs
Union Bank Of India 10.10% onwards Up to 10 lakhs
Yes Bank 10.99% onwards 1 lakh-40 lakh

Factors affecting the rate of interest on personal loans

Credit score:

This is the three-digit number between 300 and 900 based on the financial health and repayment capacity of an person. If your credit score is higher, you are more likely to seek a personal loan and earn a lower interest rate.

Loan amounts:

If the applicant borrows a higher loan amount, some lenders charge a higher interest rate. This is due to the greater risk of default, because the higher amount of the credit is usually a higher EMI payout.

Loan Tenure:

Certain borrowers charge a higher or lower interest rate on a longer term personal credit compared to the same loan with a shorter period. Usually this difference depends on the internal requirements of the bank.

Repayment capacity:

personal loan lending will in some situations be paid a higher interest rate if there is a high existing debt. The higher fixed commitment usually raises the risk of default by the lender.

How can the overall accumulated interest be measured

The annual interest rate in a loan is determined by using the form: I = P x (R/100)Who, I = Interest due, P = Principal (loan due) and R = Interest Rate (annual percentage rate). In order to measure the total accumulated interest on a personal loan, specific interest rates must subsequently be applied for every year. To remove the need for complex calculations, an EMI calculator can be used, providing you with information immediately, such as the total interest charged on your home loan.

Tips for a low PL interest rate

Typically, if you are considered to be financially responsible, the interest rate applicable to a personal loan is lower. Some forms you can get a low interest rate on your personal loan: The following is:

Maintain the high level of credit and clean credit history Sure you have minimum outstanding debt, i.e. 30 percent or less credit utilization ratio Apply for personal loans with a creditor with whom you have a previous relationship Opts for safe personal loans such as share loan, NSC, KVP, LIC, etc.

Ways to reduce the total interest payout

While the lowest interest rate on your personal loan may not be possible, there are three ways that you may decrease the total interest payments on your loan:

Opting for a shorter term– Higher average interest-bearing payout Pre-payment / exclusion – Reduces the loan principal and hence higher interest-bearing payout – The lower loan principal is equivalent to lower total interest-bearing payout lower

Pre-payment and part of personal loan payment

A personal loan is given for a defined period of time. This time is known as the term for repayment of loans. After taking the loan, the debt is expected to be repaid by the completion of the EMI loan repayment period. Nevertheless, when a loan is in use, it is called pre-payment or bankruptcy when you agree to pay your debt before the completion of the loan repayment period.

Pre-payment types:

There are 2 pre-payment forms. They are – full pre-payment and partial advance payment or only partial payment.

1. Full prepayment

When you pay off the entire outstanding debt balance before the end of the term of the loan repayment, the full prepayment is known.

Benefits of complete advance payment:

You will stop charging high interest rates on your loan.

If you have the funds to completely pay off your mortgage, you can also get rid of the mortgage.

If you have taken the loan from a lender that does not charge an interest on the advance payment of a loan, you may also avoid paying pre-payment interest.

Total Pre-Payment Disadvantages:

If the loan amount is charged to your loan’s pre-payment penalty, you may be required to pay a large amount of money to prepay your loan.

Test other related factors before you foreclose a loan. Declining a personal loan means you ‘d pay a large sum of money at once. Perhaps this is not always the best choice.

2. Partial pre payment:

If you pay a portion of the remaining loan amount before the end of the loan repayment term, it is known as a part of the prepayment process.

Benefits of Partial pre-payment :

If you have some money that is readily available, you can choose to pay part of your outstanding loan.

The part paid by your loan reduces the amount of the outstanding principal which, in turn , reduces the effective EMI amount.

The overall interest you pay will also significantly decrease.

Partial Pre-payment  disadvantages:

You will not be able to increase your savings if you do not make the partial payment early enough.

When your lender demands a partial payment fee on personal loans, you may have to invest an significant sum on it.

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